PRIYA LAXMI MILLS LTD. versus MAZDOOR MAHAJAN MANDAL, BARODA

Citation: [1977] 1 S.C.R. 709 · Decided: 23-09-1976 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Judgment (excerpt)

r 
• 
709 
PRIY A LAXMI MILLS LTD. 
v. 
--1 
MAZDOOR MAHAJAN MANDAL, BARODA 
September 23, 1976 
[Y. V. CHANDRACHUD, P. K. GOSWAMI AND A. C. GUPTA, JJ.] 
Bombay industrial Relations Act, 1946-S. 98(1)(a)-Schedule Ill item 
6 (ii)--Scope of-Workmen laid off-Lock-out declared later 
alleg111g 
unruly 
behaviour-Lockout if illegal. 
. 
According to s. 98(1)(a) of the Bombay Industrial Relations Act •. 1946 a 
lock-out shall be illegal if it is commenced or continued in cases where 1t relates 
to any industrial matter specified in Schedule III, Item 6(ii). Item 6(ii). states 
"employment including unemployment of persons previously employed m the 
industry concerned". 
On account of financial and other difficulties the appellant laid off worker~ 
in some departments of the mill. 
After a few days the management declared 
a lock out alleging that the workers gheraoed some officers in the mill, started 
'dharna' and behaved in an unruly manner. 
The Labour Court, to which the dispute was referred, held that there WM 
no evidence of violence or of gheraoes, that the situation in the mills was not 
of such a grave nature as called for a lock-out and that the management 
resorted to the lock-out on the slfghtest opportunity in order to avoid payment 
of compensation, since it was in continuous financial difficulties heading towards 
a closu:re and closure would have put the company under obliga!ion to pay 
compensation. 
Dismissing the appeal, 
HELD : (1) A lock-out can be declared for reasons similar to those described 
'in the present notice of lock-out. 
In that case although it will be lock-out in 
another sense it may not be a lock-out within the meaning of s. 3 (24) of the 
Act. That kind of lock-out with the avowed object of preventing violence and 
threat to life and property may be justified on facts in a given case. 
In such 
a situation it may be difficult to prove that it is an illegal lock-out since in an 
illegal lock-out the sole object is to compel the workmen to accept the terms 
of the employer which the workers consider as unreasonable n,nd oppressive. 
[713 F-G] 
But in the instant case though the views of the Labour Court th,at threats 
and gheraoes "are the normal. behaviour when an occasion like this takes place" 
should be disapproved, the ultimate conclusion· after appreciation of the evidenco 
was not such as would call for interference in an application under Art. 136 
of the Constitution. [713' HJ 
(2) Though the Act has not defined 'lay-out', even according to the dictionary 
meaning, lay-off means to discontinue work or activity; to dismiss or discharge 
temporarily. 
When workers are in employment and they are laid 
off, 
that 
immediately results in their unemployment, howsoever temporary. and such an 
unemployment will clearly come under item 6(ii) in Schedule III of the Act. 
Since unemployment is an industrial matter under item 6(ii) of Schedule Ill 
of the Act, the lock-out which had been found by the La.hour Court to have 
direct connection with lay off is clearly illegal under s. 98(1)(a) of the Act. 
[715 BC] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 511 of 1976. 
(Appeal by Special Leave from the order dated 19-8-1975 of the 
First Labour Court Ahmedabad in Appln. 493 /75). 
R. P. Bhatt, D. K. Agarwal, K. K. Jain and Bishamber Lal, for the 
Appellant. 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
710 
SUPREME COURT "REPORTS 
[1977] 1 S.C.R. 
V. M. Tarkunde, K. L. Hathi, P. C. Kapur and Miss M. Tarkunde 
for the Respondent. 
' 
The Judgment 'of the Court was delivered by 
GOSWAMI, J.-A complaint was made to the Labour Court by the 
respond~nt,. Mazdoor Mahajan Manda!, Baroda (briefly the union) 
alleging the lock-out declared by the appellant to 
be illegal. 
The 
appellant, Priya Laxmi Mills Ltd. (briefly the management) resisted the 
petition. 
After examining the oral and documentary evidence the 
Labour Court came to th<~ conclusion thM the lock-out was illegal under 
clauses (a) and (h) of sub-section (1) of section 98 of the Bombay 
Industrial Relations Act, 1946 (briefly the Act). 
A brief reference to the facts will be appropriate at thi~ stage. 
The present appellant purchased this textile mill from M/s. Sayaji 
Mills Ltd. in 1972 when it had about '.~500 workmen besides officers. 
Jt is said that in 197 4 the textile industry suffered adverse ma1'ket 
conditions, accumulation of stocks, shortage of raw materials and bank 
credit squeeze in conse<i4ence of which the ma

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